Gas industry stalwart John Ellice-Flint claims the Queensland government is losing $2.3 million in royalties for each day that construction of the Gladstone LNG precinct is delayed because of red tape. ‘The unintended consequence of this non-fact-based regulation has been to severely curtail activities in this state and add costs’.
Metal prices and mining shares could be lifted as mine disruptions and delays crimp supply, according to BlackRock fund manager Evy Hambro.’Looking forward a few years, it is possible to see deficits opening up in some metal markets…This is a sector that is rife with investment opportunities’.
The mining sector is far from yesterday’s news in investor circles even if some people are yet to shake that feeling of scepticism after recent headlines about cost overruns, delays and output shortfalls, writes Rhiannon Hoyle. ‘The opportunities arising from expected shortfalls should help spur a recovery in share prices after a sustained period of weaknesses’. (No Link).
Australian Financial Review
Chevron has given early December as the date when it will make an announcement about its review of costs on the Gorgon LNG project, with some expecting the budget to surge to more than $60 billion. ‘The detailed cost and schedule review on the Gorgon project is nearing completion’, a Cheron spokesman in Perth said yesterday.
Wall Street Journal
At Chevron’s Gorgon project, a budget blowout seems highly likely. The only uncertainty is that no one knows how much it’s going to cost. Chervon says it will continue working on its budget calculations for a few months. For now, investors can only hope the final Gorgon number is something less than monstrous.
Fortescue Metals Group says its surprise diversification in shale oil and gas is an attempt to secure energy for its iron ore business, rather than a punt on finding the next boom commodity. ‘(The) existing operations use a large amount of energy in the form of diesel and potentially natural gas. It is appropriate that we consider our long-term energy requirements’, says company spokeswoman Yvonne Ball.
The West Australian
WA’s prime resources lobby group, the Chamber of Minerals and Energy, claims the mining industry’s construction workforce has peaked. CME chief executive Reg Howard-Smith said while the report gave hope that some of the heat would be taken off soaring construction costs in the region, he said it would do nothing for other factors making Australia an expensive place to do business.
The Australian embassy in Jakarta has raised the stakes in a dispute over $12 million of beef that has been stranded on an Indonesian wharf for almost four months. Ambassador Greg Moriarty has written to the Indonesian trade and agriculture minister via email in recent days in the hope of resolving the issue and alerting them to the potential impact on bilateral relations.
A new West Australian export market was officially opened yesterday after the Karara project – the state’s first big magnetite project – produced high-grade concentrate from its plant for the first time. Gindalbie Matel’s managing director Tim Netscher said, ‘This is a large and complex plant and we will now be ramping up both the production rate and also ensuring we are producing premium concentrate to the required specifications’.
The Business Spectator also reports on Fortescue Metal Groups surprise move to secure a long-term gas supply from WA’s Canning Basin.
Coal trains will continue to use the Brisbane and Ipswich suburban rail corridor with alternative rail networks years away from development. The Port of Brisbane has plans to increase coal exports using the suburban corridor to Fisherman’s Island. In November 2011, chief executive Russell Smith told the Australian Financial Review the Port of Brisbane would ‘try to optimise the use of existing rail line which goes through the metro of Brisbane’. (No Link).